Is coal’s political heft plunging? Washington state may be canary in the mine

BELLINGHAM, Wash. — The U.S. coal industry, with its billions of dollars and army of lobbyists, has a storied history of muscle and might. But in this northwest corner of Washington, people like Christopher Grannis, a 69-year-old building contractor and stalwart in local civic causes, are standing up to coal.

And coal is losing.

"There are financial rewards for a few, but risks are borne by many," Grannis said, standing at a microphone at a recent Whatcom County Council meeting in support of a moratorium on new applications for fossil fuel transport through the county. Council members passed the moratorium later that evening.

U.S. coal producers, suffering under the weight of Obama administration regulations, have sought to export their fuel to Asia, hoping that a new hub of proposed export terminals along a stretch of the Pacific Northwest could serve as their industry's economic lifeline. Instead, local activists have shot down almost every project, adding a western blockade to what President Barack Obama's critics have called the "war on coal."

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And on Election Day, this state may go further, with a vote on a first-of-its-kind ballot initiative to tax carbon emissions — a policy that most economists say is the most effective way to tackle global warming. Across the country, both advocates and opponents of climate change measures are watching closely to see if the Washington ballot initiative will herald national efforts to fight global warming through higher taxation of fossil fuels.

To Yoram Bauman, a stand-up comedian with a Ph.D. in economics from the University of Washington, the combination of a freeze on coal export terminals and a carbon tax amounts to an attack on climate change from both sides of the market. "This is about supply and demand," said Bauman, who spearheaded the ballot initiative. "The coal export issue is on the supply side — keeping coal out of other countries. The tax is about reducing demand."

The state ballot initiative would create a tax of $25 per ton on planet-warming carbon dioxide emissions, and use the revenue to cut 1 percentage point from the state sales tax, give a rebate of up to $1,500 for low-income families and effectively eliminate a tax on manufacturers.

Across the country, policymakers have taken notice. N. Gregory Mankiw, an economist at Harvard, who was the chairman of President George W. Bush's Council of Economic Advisers, said Bauman's proposal "could be exactly the right model for a national carbon tax."

"It's a global problem, so it can't be done only in one state," Mankiw said. "The answer has eventually got to be a global carbon price. But this is the right step to a global solution."

The coal industry sees Washington's efforts as a one-two punch. But what really scares coal executives is the prospect of a trend.

"It would have a devastating impact — it would eliminate the use of all fossil fuels," Robert E. Murray, the chief executive of Ohio-based Murray Energy Corp., said of a national carbon tax modeled on the Washington proposal. And that would come on top of grass-roots efforts like Grannis' to block companies like Murray Energy from shipping coal from Washington's coast.

Murray spoke disdainfully of those efforts. Although he would like to ship his coal to Asia through Washington, "they won't let me," he said. "So I'm taking it to Vancouver." Of local activists like Grannis, he said: "All they're doing is hurting themselves. It's a political movement. I don't have time for these radicals."

During the past six years, six major coal export projects have been proposed in Washington and Oregon. After opposition from local and state agencies, American Indian tribes and activists like Grannis, only one project, in Longview, Washington, is still under active review, according to the Sightline Institute, a Seattle-based environmental research group.

The price of coal — and global demand for it — has also fallen, dampening the resolve by coal exporters to fight for their projects.

In a sign of how seriously the coal industry takes the actions by Washington residents, Matt Mead, the governor of Wyoming, traveled to Longview last year to make the case directly to its citizens, urging them to allow a new coal export terminal.

"The decisions those folks on the coast are making affect more than just the future of their state — it is deciding the future of citizens of Wyoming and Montana and other major coal states," said Mead, whose state is the nation's largest coal producer.

Mary L. Lyons, 64, a former office manager who retired to Longview from the Seattle area, was not impressed.

Though she has never been much involved in politics, promises about coal and its benefits brought back memories of a childhood trip through Appalachian coal country, where the poverty and environmental damage stayed in her memory, she said.

As Mead made his case, she stood up to challenge him, she recalled, and her involvement rolled on from there.

"It just made me really angry, that's all," she said.

For now, opponents of the coal terminals and supporters of the carbon tax appear to have a slight edge. A poll released on Oct. 24 by Elway Research, a Northwestern polling firm, found that 40 percent of voters surveyed supported the tax, 32 percent opposed it and 28 percent were undecided.

And supporters of the carbon tax have vastly outspent opponents. As of Oct. 27, Bauman's campaign to pass the carbon tax had raised $2.4 million and spent $1.4 million, while the campaign opposing the initiative had raised about $790,000 and spent just $411,000. About 23 percent of the money raised in favor of the tax was from outside the state, compared with about 51 percent of the money raised against it.

Those numbers also appear to bode well for the continuing efforts to block the coal export terminals, environmentalists say. But that does not mean the terminals are dead, said Clark Williams-Derry, the director of energy finance for the Sightline Institute.

"These things are zombies," he said. "They never quite die. They keep shambling forward even when their economic heart has stopped beating."